WHO - Health Systems: Improving Performance

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ealth ystems: mproving erformance

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W O R L D

HE A L T H

R E P O R T 2000

W ORLD HEALTH ORGANIZATIONp://www.who.int/whr/2000/en/whr00_en.pdf?ua=1


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ii The World Health Report 2000

WHO Library Cataloguing in Publication Data

The World health report 2000 : health systems : improving performance.1. World health 2. Health systems plans 3. Delivery of health care4. Health services administration 5. Financing, Health 6. Health servicesaccessibility 7. Social justice 8. Health care evaluation mechanismsI. Title: Health systems : improving performance

ISBN 92 4 156198 X (NLM Classification: WA 540.1)ISSN 1020-3311

The World Health Organization welcomes requests for permission to reproduce or translate its publica-tions, in part or in full. Applications and enquiries should be addressed to the Office of Publications, WorldHealth Organization, 1211 Geneva 27, Switzerland, which will be glad to provide the latest information onany changes made to the text, plans for new editions, and reprints and translations already available.

© World Health Organization 2000 All rights reserved.

The designations employed and the presentation of the material in this publication, including tables andmaps, do not imply the expression of any opinion whatsoever on the part of the Secretariat of the WorldHealth Organization concerning the legal status of any country, territory, city or area or of its authorities,or concerning the delimitation of its frontiers or boundaries. Dotted lines on maps represent approximateborder lines for which there may not yet be full agreement.

The mention of specific companies or of certain manufacturers’ products does not imply that they areendorsed or recommended by the World Health Organization in preference to others of a similar naturethat are not mentioned. Errors and omissions excepted, the names of proprietary products are distin-guished by initial capital letters.

Information concerning this publication can be obtained from: World Health Report World Health Organization1211 Geneva 27, SwitzerlandFax: (41-22) 791 4870Email: [email protected]

Copies of this publication can be ordered from: [email protected]

The principal writers of this report were Philip Musgrove, Andrew Creese,Alex Preker, Christian Baeza, Anders Anell and Thomson Prentice, with con-tributions from Andrew Cassels, Debra Lipson, Dyna Arhin Tenkorang andMark Wheeler. The report was directed by a steering committee formed byJulio Frenk (chair), Susan Holck, Christopher Murray, Orvill Adams, AndrewCreese, Dean Jamison, Kei Kawabata, Philip Musgrove and Thomson Prentice.Valuable input was received from an internal advisory group and a regionalreference group, the members of which are listed in the Acknowledgements.Additional help and advice were gratefully received from regional directors,executive directors at WHO headquarters and senior policy advisers to theDirector-General.

The conceptual framework that underpins the report was formu-lated by Christopher Murray and Julio Frenk. The development of new ana-lytical methods and summary indicators, new international data collectionefforts and extensive empirical analysis that form the basis for the reportwas undertaken by over 50 individuals, most of them from the WHO GlobalProgramme on Evidence for Health Policy, organized in eleven workinggroups. These groups covered basic demography, cause of death, burden of

The cover shows a photograph of a sculpture entitled “ Ascending Horizon” by Rafael Barrios, in Caracas,Venezuela. The photograph by Mireille Vautier is reproduced with the kind permission of ANA Agencephotographique de presse, Paris, France.

Design by Marilyn Langfeld. Layout by WHO GraphicsPrinted in France2000/12934 – Sadag – 30 000

disease, disability-adjusted life expectancy, health inequalities, responsive-ness, fairness of financial contribution, health system preferences, nationalhealth accounts and profiles, performance analysis and basic economic data.Members of each working group are listed in the Acknowledgements. Mana-gerial and technical leadership for the working groups was provided by JulioFrenk, Christopher Murray, Kei Kawabata, Alan Lopez and David Evans. A se-ries of technical reports from each of the working groups provides detailson the methods, data and results, beyond the explanations inc luded in theStatistical Annex.

The general approach to this report was discussed at an interna-tional consultative meeting on health systems, and the measurement of responsiveness was facilitated by a meeting of key informants. Both meet-ings were held in Geneva in December 1999 and the participants are listedin the Acknowledgements.

The report was edited by Angela Haden, assisted by BarbaraCampanini. Administrative and technical support for the World Health Re-port team were provided by Shelagh Probst, Michel Beusenberg, AmelChaouachi and Chrissie Chitsulo. The index was prepared by Liza Weinkove.


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Overview iii

CONTENTS

MESSAGE FROM THE DIRECTOR -GENERAL VII

O VERVIEW XI

How health systems have evolved xiii

The potential to improve xiv

Providing better services xv

Finding a better balance xvi

Protecting the poor xviii

CHAPTER 1

W HY DO HEALTH S YSTEMS M ATTER ? 1The changing landscape 3

What is a health system? 5

What do health systems do? 7

Why health systems matter 8

How modern health systems evolved 11

Three generations of health system reform 13

Focusing on performance 17

CHAPTER 2

HOW W ELL DO HEALTH S YSTEMS PERFORM? 21 Attainment and performance 23

Goals and functions 23

Goodness and fairness: both level and distribution matter 26

Measuring goal achievement 27

Overall attainment: goodness and fairness combined 40

Performance: getting results from resources 40

Improving performance: four key functions 44

CHAPTER 3

HEALTH SERVICES: W ELL CHOSEN, W ELL ORGANIZED? 47Organizational failings 49

People at the centre of health services 50

Choosing interventions: getting the most health from resources 52

Choosing interventions: what else matters? 55

Choosing interventions: what must be known? 57

Enforcing priorities by rationing care 58

After choosing priorities: service organization and provider incentives 61

Organizational forms 62


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iv The World Health Report 2000

Service delivery configurations 63

Aligning incentives 64

Integration of provision 68

CHAPTER 4

W HAT R ESOURCES ARE NEEDED? 73

Balancing the mix of resources 75

Human resources are vital 77

Adjusting to advances in knowledge and technology 81

Public and private production of resources 82

The legacy of past investments 84

Health care resource profiles 85

Changing investment patterns 88

The way forward 90

CHAPTER 5

W HO P AYS FOR HEALTH S YSTEMS? 93

How financing works 95

Prepayment and collection 97

Spreading risk and subsidizing the poor: pooling of resources 99

Strategic purchasing 104

Organizational forms 108

Incentives 110

How financing affects equity and efficiency 113

CHAPTER 6

HOW IS THE PUBLIC INTEREST PROTECTED? 117

Governments as stewards of health resources 119

What is wrong with stewardship today? 120

Health policy – vision for the future 122

Setting the rules, ensuring compliance 124

Exercising intelligence, sharing knowledge 129

Strategies, roles and resources: who should do what? 132

What are the challenges? 135

How to improve performance 137

STATISTICAL A NNEX 143

Explanatory notes 144

Annex Table 1 Health system attainment and performance in all Member States,

ranked by eight measures, estimates for 1997 152

Annex Table 2 Basic indicators for all Member States 156

Annex Table 3 Deaths by cause, sex and mortality stratum in WHO Regions,

estimates for 1999 164


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Overview v

Annex Table 4 Burden of disease in disability-adjusted life years (DALYs)

by cause, sex and mortality stratum in WHO Regions,


Annex Table 5 Health attainment, level and distribution in all Member States,

estimates for 1997 and 1999 176

Annex Table 6 Responsiveness of health systems, level and distribution in

all Member States, WHO indexes, estimates for 1999 184

Annex Table 7 Fairness of financial contribution to health systems in all

Member States, WHO index, estimates for 1997 188

Annex Table 8 Selected national health accounts indicators for all Member States,


Annex Table 9 Overall health system attainment in all Member States,

WHO index, estimates for 1997 196

Annex Table 10 Health system performance in all Member States, WHO indexes,


LIST OF MEMBER STATES BY WHO R EGION AND

MORTALITY STRATUM 204

A CKNOWLEDGEMENTS 206

INDEX 207

T ABLES

Table 3.1 Interventions with a large potential impact on health outcomes 53

Table 3.2 Examples of organizational incentives for ambulatory care 67

Table 5.1 Estimated out-of-pocket share in health spending by income level, 1997 96

Table 5.2 Approaches to spreading risk and subsidizing the poor: country cases 101Table 5.3 Provider payment mechanisms and provider behaviour 106

Table 5.4 Exposure of different organizational forms to internal incentives 111

Table 5.5 Exposure of different organizational forms to external incentives 112

FIGURES

Figure 1.1 Coverage of population and of interventions under different notions of

primary health care 15

Figure 2.1 Relations between functions and objectives of a health system 25

Figure 2.2 Life expectancy and disability-adjusted life expectancy for males

and females, by WHO Region and stratum defined by child

mortality and adult mortality, 1999 29

Figure 2.3 Inequality in life expectancy at birth, by sex, in six countries 30

Figure 2.4 Relative scores of health system responsiveness elements,

in 13 countries, 1999 34

Figure 2.5 Household contributions to financing health, as percentage of

capacity to pay, in eight countries 37

Figure 2.6 Performance on level of health (disability-adjusted life expectancy)

relative to health expenditure per capita, 191 Member States, 1999 43


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vi The World Health Report 2000

Figure 2.7 Overall health system performance (all attainments) relative to

health expenditure per capita, 191 Member States, 1997 44

Figure 3.1 The multiple roles of people in health systems 50

Figure 3.2 Questions to ask in deciding what interventions to finance and provide 55

Figure 3.3 Different ways of rationing health interventions according to cost and

frequency of need 60

Figure 3.4 Different internal incentives in three organizational structures 66

Figure 4.1 Health system inputs: from financial resources to health interventions 75

Figure 4.2 Health systems input mix: comparison of four high income countries,

around 1997 86

Figure 4.3 Health systems input mix: comparison of four middle income countries,

around 1997 87

Figure 5.1 Pooling to redistribute risk, and cross-subsidy for greater equity 100

Figure 5.2 Structure of health system financing and provision in four countries 102

BOXES

Box 1.1 Poverty, ill-health and cost-effectiveness 5Box 1.2 Health knowledge, not income, explains historical change

in urban –rural health differences 10

Box 2.1 Summary measures of population health 28

Box 2.2 How important are the different elements of responsiveness? 32

Box 2.3 What does fair contribution measure and not measure? 38

Box 2.4 Weighting the achievements that go into overall attainment 39

Box 2.5 Estimating the best to be expected and the least to be demanded 41

Box 4.1 Substitution among human resources 78

Box 4.2 Human resources problems in service delivery 79

Box 4.3 A widening gap in technology use? 82

Box 4.4 The Global Alliance for Vaccines and Immunization (GAVI) 83Box 4.5 Investment in hospitals in countries of the former Soviet Union

prior to policy reform 89

Box 5.1 The importance of donor contributions in revenue collection

and purchasing in developing countries 96

Box 5.2 The Chilean health insurance market: when stewardship fails

to compensate for pooling competition problems and for

imbalances between internal and external incentives 109

Box 6.1 Trends in national health policy: from plans to frameworks 121

Box 6.2 Ghana’s medium-term health policy framework 122

Box 6.3 SWAPs: are they good for stewardship? 123

Box 6.4 Stewardship: the Hisba system in Islamic countries 124

Box 6.5 South Africa: regulating the private insurance market to

increase risk pooling 126

Box 6.6 Opening up the health insurance system in the Netherlands 128

Box 6.7 Responsiveness to patients’ rights 130

Box 6.8 Towards good stewardship – the case of pharmaceuticals 131

Box 6.9 Thailand: the role of the media in health system stewardship 133


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Overview vii

MESSAGE FROM

THE DIRECTOR -GENERAL

Dr Gro Harlem Brundtland

hat makes for a good health system? What makes a health system fair? And how do we know whether a health system is performing as well as it could?These questions are the subject of public debate in most countries around the world.Naturally, answers will depend on the perspective of the respondent. A minister of health

defending the budget in parliament; a minister of finance attempting to balance multiple

claims on the public purse; a harassed hospital superintendent under pres-

sure to find more beds; a health centre doctor or nurse who has just run

out of antibiotics; a news editor looking for a story; a mother seeking

treatment for her sick two-year old child; a pressure group lobbying

for better services – all will have their views. We in the World Health

Organization need to help all involved to reach a balanced judgement.

Whatever standard we apply, it is evident that health systems in some

countries perform well, while others perform poorly. This is not due just

to differences in income or expenditure: we know that performance can vary markedly, even in countries with very similar levels of health

spending. The way health systems are designed, managed and

financed affects people’s lives and livelihoods. The difference be-

tween a well-performing health system and one that is failing

can be measured in death, disability, impoverishment, humilia-

tion and despair.

When I became Director-General in 1998, one of my prime

concerns was that health systems development should become

increasingly central to the work of WHO. I also took the view that

while our work in this area must be consistent with the values of health for all, our recom-

mendations should be based on evidence rather than ideology. This report is a product of those concerns. I hope it will be seen as a landmark publication in the field of health sys-

tems development. Improving the performance of health systems around the world is the

raison d’être of this report.

Our challenge is to gain a better understanding of the factors that make a difference. It

has not been an easy task. We have debated how a health system should be defined in

order to extend our field of concern beyond the provision of public and personal health

services, and encompass other key areas of public policy that have an impact on people’s

health. This report suggests that the boundaries of health systems should encompass all

actions whose primary intent is to improve health.


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viii The World Health Report 2000

The report breaks new ground in the way that it helps us understand the goals of health

systems. Clearly, their defining purpose is to improve and protect health – but they have

other intrinsic goals. These are concerned with fairness in the way people pay for health

care, and with how systems respond to people’s expectations with regard to how they are

treated. Where health and responsiveness are concerned, achieving a high average level is

not good enough: the goals of a health system must also include reducing inequalities, in

ways that improve the situation of the worst-off. In this report attainment in relation to

these goals provides the basis for measuring the performance of health systems.

If policy-makers are to act on measures of performance, they need a clear understand-

ing of the key functions that health systems have to undertake. The report defines four key

functions: providing services; generating the human and physical resources that make service

delivery possible; raising and pooling the resources used to pay for health care; and, most

critically, the function of stewardship – setting and enforcing the rules of the game and

providing strategic direction for all the different actors involved.

Undoubtedly, many of the concepts and measures used in the report require further

refinement and development. To date, our knowledge about health systems has been ham-

pered by the weakness of routine information systems and insufficient attention to re-search. This report has thus required a major effort to assemble data, collect new information,

and carry out the required analysis and synthesis. It has also drawn on the views of a large

number of respondents, within and outside WHO, concerning the interpretation of data

and the relative importance of different goals.

The material in this report cannot provide definitive answers to every question about

health systems performance. It does though bring together the best available evidence to

date. It demonstrates that, despite the complexity of the topic and the limitations of the

data, it is possible to get a reasonable approximation of the current situation, in a way that

provides an exciting agenda for future work.

I hope that the report will contribute to work on how to assess and improve health

systems. Performance assessment allows policy-makers, health providers and the popula-tion at large to see themselves in terms of the social arrangements they have constructed to

improve health. It invites reflection on the forces that shape performance and the actions

that can improve it.

For WHO,The world health report 2000 is a milestone in a long-term process. The meas-

urement of health systems performance will be a regular feature of all World health reports

from now on – using improved and updated information and methods as they are devel-

oped.

Even though we are at an early stage in understanding a complex set of interactions,

some important conclusions are clear.

• Ultimate responsibility for the performance of a country ’s health system lies with

government. The careful and responsible management of the well-being of the popu-lation – stewardship – is the very essence of good government. The health of people

is always a national priority: government responsibility for it is continuous and per-

manent.

• Dollar for dollar spent on health, many countries are falling short of their perform-

ance potential. The result is a large number of preventable deaths and lives stunted

by disability. The impact of this failure is born disproportionately by the poor.


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Overview ix

• Health systems are not just concerned with improving people’s health but with pro-

tecting them against the financial costs of illness. The challenge facing governments

in low income countries is to reduce the regressive burden of out-of-pocket payment

for health by expanding prepayment schemes, which spread financial risk and re-

duce the spectre of catastrophic health care expenditures.

• Within governments, many health ministries focus on the public sector often disre-

garding the – frequently much larger – private finance and provision of care. A grow-

ing challenge is for governments to harness the energies of the private and voluntary

sectors in achieving better levels of health systems performance, while offsetting the

failures of private markets.

• Stewardship is ultimately concerned with oversight of the entire system, avoiding

myopia, tunnel vision and the turning of a blind eye to a system’s failings. This report

is meant to make that task easier by bringing new evidence into sharp focus.

In conclusion, I hope this report will help policy-makers to make wise choices. If they do

so, substantial gains will be possible for all countries, and the poor will be the principal

beneficiaries.

Gro Harlem Brundtland

Geneva

June 2000

Message fron the Director-General


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Overview xi

O VERVIEW

oday and every day, the lives of vast numbers of people lie in the hands of health systems. From the safe delivery of a healthy baby to the care with dignity of thefrail elderly, health systems have a vital and continuing responsibility to people throughout

the lifespan. They are crucial to the healthy development of individuals, families and socie-ties everywhere.

In this report, health systems are defined as comprising all the organizations, institu-

tions and resources that are devoted to producing health actions. A health action is defined

as any effort, whether in personal health care, public health services or through intersectoral

initiatives, whose primary purpose is to improve health.

But while improving health is clearly the main objective of a health system, it is not the

only one. The objective of good health itself is really twofold: the best attainable average

level – goodness – and the smallest feasible differences among individuals and groups –

fairness. Goodness means a health system responding well to what people expect of it;

fairness means it responds equally well to everyone, without discrimination. In The world

health report 2000 , devoted entirely to health systems, the World Health Organization ex-pands its traditional concern for people’s physical and mental well-being to emphasize

these other elements of goodness and fairness.

To an unprecedented degree, it takes account of the roles people have as providers and

consumers of health services, as financial contributors to health systems, as workers within

them, and as citizens engaged in the responsible management, or stewardship, of them.

And it looks at how well or how badly systems address inequalities, how they respond to

people’s expectations, and how much or how little they respect people’s dignity, rights and

freedoms.

The world health report 2000

also breaks new ground in presenting for the first time an

index of national health systems’ performance in trying to achieve three overall goals: good

health, responsiveness to the expectations of the population,and fairness of financial contribution.Progress towards them depends crucially on how well systems carry out four vital func-

tions. These are: service provision, resource generation, financing and stewardship. The report

devotes a chapter to each function, and reaches conclusions and makes policy recommen-

dations on each. It places special emphasis on stewardship, which has a profound influence

on the other three.

Many questions about health system performance have no clear or simple answers –

because outcomes are hard to measure and it is hard to disentangle the health system’s

contribution from other factors. Building on valuable previous work, this report introduces

WHO’s framework for assessing health system performance. By clarifying and quantifying


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xii The World Health Report 2000

the goals of health systems and relating them to the essential functions, the framework is

meant to help Member States measure their own performance, understand the factors that

contribute to it, improve it, and respond better to the needs and expectations of the people

they serve and represent. The analysis and synthesis of a wealth of information is summa-

rized by a measure of overall achievement and by a performance index which should lead

to much new research and policy development. The index will be a regular feature of forth-

coming World health reports and will be improved and updated every year.

The framework was the basis for round table discussions entitled “ Addressing the major

health system challenges” among Ministers of Health at the 53rd World Health Assembly in

Geneva in May 2000. The subject of these discussions is reflected throughout the report,

and the outcome of the discussions will help orient future work on the framework.

Policy-makers need to know why health systems perform in certain ways and what they

can do to improve the situation. All health systems carry out the functions of providing or

delivering personal and non-personal health services; generating the necessary human

and physical resources to make that possible; raising and pooling the revenues used to

purchase services; and acting as the overall stewards of the resources, powers and expecta-

tions entrusted to them.Comparing the way these functions are actually carried out provides a basis for under-

standing performance variations over time and among countries. Undoubtedly, many of

the concepts and measures used in the report will require refinement. There is an impor-

tant agenda of developing more and better data on goal attainment and on health system

functions. Yet much can be learned from existing information. The report presents the best

available evidence to date. In doing so, it seeks to push forward national and global devel-

opment of the skills and information required to build a solid body of evidence on the level

and determinants of performance, as a basis for improving how systems work.

“Improving performance” are therefore the key words and the raison d’être of this report.

The overall mission of WHO is the attainment by all people of the highest possible level of

health, with special emphasis on closing the gaps within and among countries. The Or-ganization’s ability to fulfil this mission depends greatly on the effectiveness of health sys-

tems in Member States – and strengthening those systems is one of WHO’s four strategic

directions. It connects very well with the other three: reducing the excess mortality of poor

and marginalized populations; dealing effectively with the leading risk factors; and placing

health at the centre of the broader development agenda.

Combating disease epidemics, striving to reduce infant mortality, and fighting for safer

pregnancy are all WHO priorities. But the Organization will have very little impact in these

and other battlegrounds unless it is equally concerned to strengthen the health systems

through which the ammunition of life-saving and life-enhancing interventions are deliv-

ered to the front line.

This report asserts that the differing degrees of efficiency with which health systemsorganize and finance themselves, and react to the needs of their populations, explain much

of the widening gap in death rates between the rich and poor, in countries and between

countries, around the world. Even among countries with similar income levels, there are

unacceptably large variations in health outcomes. The report finds that inequalities in life

expectancy persist, and are strongly associated with socioeconomic class, even in countries

that enjoy an average of quite good health. Furthermore the gap between rich and poor

widens when life expectancy is divided into years in good health and years of disability. In

effect, the poor not only have shorter lives than the non-poor, a bigger part of their lifetime

is surrendered to disability.


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Overview xiii

In short, how health systems – and the estimated 35 million or more people they em-

ploy worldwide – perform makes a profound difference to the quality and value, as well as

the length of the lives of the billions of people they serve.

HOW HEALTH SYSTEMS HAVE EVOLVED

This report’s review of the evolution of modern health systems, and their various stages

of reform, leaves little doubt that in general they have already contributed enormously to

better health for most of the global population during the 20th century.

Today, health systems in all countries, rich and poor, play a bigger and more influential

role in people’s lives than ever before. Health systems of some sort have existed for as long

as people have tried to protect their health and treat diseases. Traditional practices, often

integrated with spiritual counselling and providing both preventive and curative care, have

existed for thousands of years and often coexist today with modern medicine.

But 100 years ago, organized health systems in the modern sense barely existed. Few

people alive then would ever visit a hospital. Most were born into large families and faced

an infancy and childhood threatened by a host of potentially fatal diseases –

measles, small-pox, malaria and poliomyelitis among them. Infant and child mortality rates were very

high, as were maternal mortality rates. Life expectancy was short – even half a century ago

it was a mere 48 years at birth. Birth itself invariably occurred at home, rarely with a physi-

cian present.

As a brief illustration of the contemporary role of health systems, one particular birth

receives special attention in this report. Last year, United Nations experts calculated that

the global population would reach six billion on 13 October 1999. On that day, in a mater-

nity clinic in Sarajevo, a baby boy was designated as the sixth billionth person on the planet.

He entered the world with a life expectancy of 73 years, the current Bosnian average.

He was born in a big city hospital, staffed by well-trained midwives, nurses, doctors and

technicians. They were supported by high-technology equipment, drugs and medicines.The hospital is part of a sophisticated health service, connected in turn to a wide network of

people and actions that in one way or another are concerned with measuring, maintaining

and improving his health for the rest of his life – as for the rest of the population. Together,

all these interested parties, whether they provide services, finance them or set policies to

administer them, make up a health system.

Health systems have undergone overlapping generations of reforms in the past 100

years, including the founding of national health care systems and the extension of social

insurance schemes. Later came the promotion of primary health care as a route to achiev-

ing affordable universal coverage – the goal of health for all. Despite its many virtues, a

criticism of this route has been that it gave too little attention to people’s demand for health

care, and instead concentrated almost exclusively on their perceived needs. Systems havefoundered when these two concepts did not match, because then the supply of services

offered could not possibly align with both.

In the past decade or so there has been a gradual shift of vision towards what WHO calls

the “new universalism”. Rather than all possible care for everyone, or only the simplest and

most basic care for the poor, this means delivery to all of high-quality essential care, defined

mostly by criteria of effectiveness, cost and social acceptability. It implies explicit choice of

priorities among interventions, respecting the ethical principle that it may be necessary and

efficient to ration services, but that it is inadmissible to exclude whole groups of the popu-

lation.


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xiv The World Health Report 2000

This shift has been partly due to the profound political and economic changes of the last

20 years or so. These include the transformation from centrally planned to market-oriented

economies, reduced state intervention in national economies, fewer government controls,

and more decentralization.

Ideologically, this has meant greater emphasis on individual choice and responsibility.

Politically, it has meant limiting promises and expectations about what governments should

do. But at the same time people’s expectations of health systems are greater than ever

before. Almost every day another new drug or treatment, or a further advance in medicine

and health technology, is announced. This pace of progress is matched only by the rate at

which the population seeks its share of the benefits.

The result is increasing demands and pressures on health systems, including both their

public and private sectors, in all countries, rich or poor. Clearly, limits exist on what govern-

ments can finance and on what services they can deliver. This report means to stimulate

public policies that acknowledge the constraints governments face. If services are to be

provided for all, then not all services can be provided.

THE POTENTIAL TO IMPROVE

Within all systems there are many highly skilled, dedicated people working at all levels

to improve the health of their communities. As the new century begins, health systems

have the power and the potential to achieve further extraordinary improvements.

Unfortunately, health systems can also misuse their power and squander their poten-

tial. Poorly structured, badly led, inefficiently organized and inadequately funded health

systems can do more harm than good.

This report finds that many countries are falling far short of their potential, and most are

making inadequate efforts in terms of responsiveness and fairness of financial contribu-

tion. There are serious shortcomings in the performance of one or more functions in virtu-

ally all countries.These failings result in very large numbers of preventable deaths and disabilities in each

country; in unnecessary suffering; in injustice, inequality and denial of basic rights of indi-

viduals. The impact is most severe on the poor, who are driven deeper into poverty by lack

of financial protection against ill-health. In trying to buy health from their own pockets,

sometimes they only succeed in lining the pockets of others.

In this report, the poor also emerge as receiving the worst levels of responsiveness –

they are treated with less respect for their dignity, given less choice of service providers and

offered lower-quality amenities.

The ultimate responsibility for the overall performance of a country ’s health system lies

with government, which in turn should involve all sectors of society in its stewardship. The

careful and responsible management of the well-being of the population is the very es-sence of good government. For every country it means establishing the best and fairest

health system possible with available resources. The health of the people is always a na-

tional priority: government responsibility for it is continuous and permanent. Ministries of

health must therefore take on a large part of the stewardship of health systems.

Health policy and strategies need to cover the private provision of services and private

financing, as well as state funding and activities. Only in this way can health systems as a

whole be oriented towards achieving goals that are in the public interest. Stewardship en-

compasses the tasks of defining the vision and direction of health policy, exerting influence

through regulation and advocacy, and collecting and using information. At the interna-


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Overview xv

tional level, stewardship means mobilizing the collective action of countries to generate

global public goods such as research, while fostering a shared vision towards more equita-

ble development across and within countries. It also means providing an evidence base to

assist countries’ efforts to improve the performance of their health systems.

But this report finds that some countries appear to have issued no national health policy

statement in the past decade; in others, policy exists in the form of documents which gather

dust and are never translated into action. Too often, health policy and strategic planning

have envisaged unrealistic expansion of the publicly funded health care system, sometimes

well in excess of national economic growth. Eventually, the policy and planning document

is seen as infeasible and is ignored.

A policy framework should recognize all three health system goals and identify strate-

gies to improve the attainment of each. But not all countries have explicit policies on the

overall goodness and fairness of the health system. Public statements about the desired

balance among health outcomes, system responsiveness and fairness in financial contribu-

tion are yet to be made in many countries. Policy should address the way in which the

system’s key functions are to be improved.

This report finds that, within governments, many health ministries are seriously short-sighted, focusing on the public sector and often disregarding the – frequently much larger

– private provision of care. At worst, governments are capable of turning a blind eye to a

“black market” in health, where widespread corruption, bribery, “moonlighting ” and other

illegal practices have flourished for years and are difficult to tackle successfully. Their vision

does not extend far enough to help construct a healthier future.

Moreover, some health ministries are prone to losing sight completely of their most

important target: the population at large. Patients and consumers may only come into view

when rising public dissatisfaction forces them to the ministry ’s attention.

Many health

ministries condone the evasion of regulations that they themselves have

created or are supposed to implement in the public interest. Rules rarely enforced are invi-

tations to abuse. A widespread example is the condoning of public employees charging illicit fees from patients and pocketing the proceeds, a practice known euphemistically as

“informal charging ”. Such corruption deters poor people from using services they need,

making health financing even more unfair, and it distorts overall health priorities.

PROVIDING BETTER SERVICES

Too many governments know far too little about what is happening in the provision of

services to their people. In many countries, some if not most physicians work simultane-

ously for the government and in private practice. When public providers illegally use public

facilities to provide special care to private patients, the public sector ends up subsidizing

unofficial private practice. Health professionals are aware of practice-related laws but know that enforcement is weak or non-existent. Professional associations, nominally responsible

for self-regulation, are too often ineffective.

Oversight and regulation of private sector providers and insurers must be placed high

on national policy agendas. At the same time it is crucial to adopt incentives that are sensi-

tive to performance. Good policy needs to differentiate between providers (public or pri-

vate) who are contributing to health goals, and those who are doing damage, and encourage

or sanction appropriately. Policies to change the balance between providers’ autonomy and

accountability need to be monitored closely in terms of their effect on health, responsive-

ness and the distribution of the financing burden.


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xvi The World Health Report 2000

Where particular practices and procedures are known to be harmful, the health ministry

has a clear responsibility to combat them with public information and legal measures. Phar-

maceutical sales by unregistered sellers, the dangers of excessive antibiotic prescription

and of non-compliance with recommended dosages should all be objects of public stew-

ardship, with active support from information campaigns targeted at patients, the provid-

ers in question and local health authorities.

Contrary to what might be expected, the share of private health financing tends to be

larger in countries where income levels are lower. But poorer countries seldom have clear

lines of policy towards the private sector. They thus have major steps to take in recognizing

and communicating with the different groups of private providers, the better to influence

and regulate them.

The private sector has the potential to play a positive role in improving the performance

of the health system. But for this to happen, governments must fulfil the core public func-

tion of stewardship. Proper incentives and adequate information are two powerful tools to

improve performance.

To move towards higher quality care, more and better information is commonly re-

quired on existing provision, on the interventions offered and on major constraints on serv-ice implementation. Local and national risk factors need to be understood. Information on

numbers and types of providers is a basic – and often incompletely fulfilled – requirement.

An understanding of provider market structure and utilization patterns is also needed, so

that policy-makers know why this array of provision exists, as well as where it is growing.

An explicit, public process of priority setting should be undertaken to identify the con-

tents of a benefit package which should be available to all, and which should reflect local

disease priorities and cost effectiveness, among other criteria. Supporting mechanisms –

clinical protocols, registration, training, licensing and accreditation processes – need to be

brought up to date and used. There is a need for a regulatory strategy which distinguishes

between the components of the private sector and includes the promotion of self-regula-

tion.Consumers need to be better informed about what is good and bad for their health, why

not all of their expectations can be met, and that they have rights which all providers should

respect. Aligning organizational structures and incentives with the overall objectives of

policy is a task for stewardship, not just for service providers.

Monitoring is needed to assess behavioural change associated with decentralizing au-

thority over resources and services, and the effects of different types of contractual relation-

ships with public and private providers. Striking a balance between tight control and the

independence needed to motivate providers is a delicate task, for which local solutions

must be found. Experimentation and adaptation will be necessary in most settings. A sup-

porting process for exchanging information will be necessary to create a ‘ virtual network’

from a large set of semi-autonomous providers.

FINDING A BETTER BALANCE

The report says serious imbalances exist in many countries in terms of human and physical

resources, technology and pharmaceuticals. Many countries have too few qualified health

personnel, others have too many. Health system staff in many low-income nations are

inadequately trained, poorly-paid and work in obsolete facilities with chronic shortages of

equipment. One result is a “brain drain” of talented but demoralized professionals who

either go abroad or move into private practice. Here again, the poor are most affected.


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Overview xvii

Overall, governments have too little information on financial flows and the generation

of human and material resources. To rectify this, national health accounts (NHAs) should

be much more widely calculated and used. They provide the essential information needed

to monitor the ratio of capital to recurrent expenditure, or of any one input to the total, and

to observe trends. NHAs capture foreign as well as domestic, public as well as private in-

puts and usefully assemble data on physical quantities – such as the numbers of nurses,

medical equipment, district hospitals – as well as their costs.

NHAs in some form now exist for most countries, but they are still often rudimentary

and are not yet widely used as tools of stewardship. NHA data allow the ministry of health

to think critically about input purchases by all fundholders in the health system.

The concept of strategic purchasing, discussed in this report, does not only apply to the

purchase of health care services: it applies equally to the purchase of health system inputs.

Where inputs such as trained personnel, diagnostic equipment and vehicles are purchased

directly with public funds, the ministry of health has a direct responsibility to ensure that

value for money is obtained – not only in terms of good prices, but also in ensuring that

effective use is made of the items purchased.

Where health system inputs are purchased by other agencies (such as private insurers,providers, households or other public agencies) the ministry ’s stewardship role consists of

using its regulatory and persuasive influence to ensure that these purchases improve, rather

than worsen, the efficiency of the input mix.

The central ministry may have to decide on major capital decisions, such as tertiary

hospitals or medical schools. But regional and district health authorities should be en-

trusted with the larger number of lower-level purchasing decisions, using guidelines, crite-

ria and procedures promoted by central government.

Ensuring a healthy balance between capital and recurrent spending in the health sys-

tem requires analysis of trends in both public and private spending and a consideration of

both domestic and foreign funds. A clear policy framework, incentives, regulation and pub-

lic information need to be brought to bear on important capital decisions in the entiresystem to counter ad hoc decisions and political influence.

In terms of human resources, similar combinations of strategy have had some success in

tackling the geographical imbalances common within countries. In general, the content of

training needs to be reassessed in relation to workers’ actual job content, and overall supply

often needs to be adjusted to meet employment opportunities.

In some countries where the social return to medical training is negative, educational

institutions are being considered for privatization or closure. Certainly, public subsidies for

training institutions often need to be reconsidered in the light of strategic purchasing. Re-

balancing the intake levels of different training facilities is often possible without closure,

and might free resources which could be used to retrain in scarcer skills those health work-

ers who are clearly surplus to requirements.Major equipment purchases are an easy way for the health system to waste resources,

when they are underused, yield little health gain, and use up staff time and recurrent budget.

They are also difficult to control. All countries need access to information on technology

assessment, though they do not necessarily need to produce this themselves. The steward-

ship role lies in ensuring that criteria for technology purchase in the public sector (which all

countries need) are adhered to, and that the private sector does not receive incentives or

public subsidy for its technology purchases unless these further the aim of national policy.

Providers frequently mobilize public support or subscriptions for technology purchase,

and stewardship has to ensure that consumers understand why technology purchases have


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xviii The World Health Report 2000

to be rationed like other services. Identifying the opportunity cost of additional technology

in terms of other needed services may help to present the case to the public.

PROTECTING THE POOR

In the world’s poorest countries, most people, particularly the poor, have to pay for

health care from their own pockets at the very time they are sick and most in need of it.

They are less likely to be members of job-based prepayment schemes, and have less access

than better-off groups to subsidized services.

This report presents convincing evidence that prepayment is the best form of revenue

collection, while out-of-pocket payment tends to be quite regressive and often impedes

access to care. In poor countries, the poor often suffer twice – all of them have to pay an

unfair share through taxes or insurance schemes, whether or not they use health services,

and some of them have also to pay an even more unfair contribution from their pockets.

Evidence from many health systems shows that prepayment through insurance schemes

leads to greater financing fairness. The main challenge in revenue collection is to expand

prepayment, in which public financing or mandatory insurance will play a central role. Inthe case of revenue pooling, creating as wide a pool as possible is critical to spreading

financial risk for health care, and thus reducing individual risk and the spectre of impover-

ishment from health expenditures.

Insurance systems entail integration of resources from individual contributors or sources

both to pool and to share risks across the population. Achieving greater fairness in finan-

cing is only achievable through risk pooling – that is, those who are healthy subsidize those

who are sick, and those who are rich subsidize those who are poor. Strategies need to be

designed for expansion of risk pooling so that progress can be made in such subsidies.

Raising the level of public finance for health is the most obvious route to increased

prepayment. But the poorest countries raise less, in public revenue, as a percentage of na-

tional income than middle and upper income countries. Where there is no feasible organi-zational arrangement to boost prepayment levels, both donors and governments should

explore ways of building enabling mechanisms for the development or consolidation of

very large pools. Insurance schemes designed to expand membership among the poor

would, moreover, be an attractive way to channel external assistance in health, alongside

government revenue.

Many countries have employment-based schemes which increase benefits for their privi-

leged membership – mainly employees in the formal sector of the economy – rather than

widen them for a larger pool. Low income countries could encourage different forms of

prepayment – job-based, community-based, or provider-based – as part of a preparatory

process of consolidating small pools into larger ones. Governments need to promote com-

munity rating (i.e. each member of the community pays the same premium), a commonbenefit package and portability of benefits among insurance schemes, and public funds

should pay for the inclusion of poor people in such schemes.

In middle income countries the policy route to fair prepaid systems is through strength-

ening the often substantial mandatory, income-based and risk-based insurance schemes,

again ensuring increased public funding to include the poor. Although most industrialized

countries already have very high levels of prepayment, some of these strategies are also

relevant to them.


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Overview xix

To ensure that prepaid finance obtains the best possible value for money, strategic pur-

chasing needs to replace much of the traditional machinery linking budget holders to serv-

ice providers. Budget holders will no longer be passive financial intermediaries. Strategic

purchasing means ensuring a coherent set of incentives for providers, whether public or

private, to encourage them to offer priority interventions efficiently. Selective contracting

and the use of several payment mechanisms are needed to set incentives for better respon-

siveness and improved health outcomes.

In conclusion, this report sheds new light on what makes health systems behave in

certain ways, and offers them better directions to follow in pursuit of their goals. WHO

hopes it will help policy-makers weigh the many complex issues involved and make wise

choices. If they do so, substantial gains will be possible for all countries; and the poor will be

the principal beneficiaries.


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Why do Health Systems Matter? 1

C HAPTER O NE

hy do

ealth ystems atter?

Health systems consist of all the people and actions whose primary purpose is to

improve health. They may be integrated and centrally directed, but often they

are not. After centuries as small-scale, largely private or charitable, mostly inef-

fectual entities, they have grown explosively in this century as knowledge has

been gained and applied. They have contributed enormously to better health,

but their contribution could be greater still, especially for the poor. Failure toachieve that potential is due more to systemic failings than to technical limita-

tions. It is therefore urgent to assess current performance and to judge how

health systems can reach their potential.

1


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1

W HY DO

HEALTH S YSTEMS M ATTER ?

THE CHANGING LANDSCAPE

n 13 October 1999, in a maternity clinic in Sarajevo, Helac Fatima gave birth to a

son. This was a special occasion, because United Nations demographers had cal-

culated the global population would reach six billion on that day. The little Sarajevo boy

was designated as the sixth billionth person on the planet.

Today there are four times as many people in the world as there were 100 years ago –

there are now about 4000 babies born every minute of every day – and among the count-

less, bewildering changes that have occurred since then, some of the most profound have

occurred in human health. For example, few if any of Helac Fatima’s ancestors around 1899

were likely to have seen a hospital, far less been born in one.

The same was true for the great majority of the 1.5 billion people then alive. Throughout

the world, childbirth invariably occurred at home, rarely with a physician present. Most

people relied on traditional remedies and treatments, some of them thousands of years old.

Most babies were born into large families and faced an infancy and childhood threatened

by a host of potentially fatal diseases – measles, smallpox, malaria and poliomyelitis among

them. Infant and child mortality rates were very high, as were maternal mortality rates. Life

expectancy for adults was short – even half a century ago it was a mere 48 years at birth.

Last year the son of Helac Fatima entered the world with a life expectancy at birth of 73

years – the current Bosnian average. The global average is 66 years. He was born in a big city

hospital staffed by well-trained midwives, nurses, doctors and technicians – who were sup-

ported by modern equipment, drugs and medicines. The hospital is part of a sophisticated

health service. It is connected in turn to a wide network of people and actions that in one

way or another are concerned with maintaining and improving his health for the rest of his

life – as for the rest of the population. Together, all these interested parties, whether they provide services, finance them or set policies to administer them, make up a health system.

Health systems have played a part in the dramatic rise in life expectancy that occurred

during the 20th century. They have contributed enormously to better health and influenced

the lives and well-being of billions of men, women and children around the world. Their

role has become increasingly important.

Enormous gaps remain, however, between the potential of health systems and their

actual performance, and there is far too much variation in outcomes among countries which

seem to have the same resources and possibilities. Why should this be so? Health systems

would seem no different from other social systems in facing demands and incentives to


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4 The World Health Report 2000

perform as well as possible, and it might be expected that – with some degree of regulation

by the state – their performance could be largely left to markets, just as with the provision

of most other goods and services.

But health is fundamentally different from other things that people want, and the dif-

ference is rooted in biology. As eloquently expressed by Jonathan Miller, “Of all the objects

in the world, the human body has a peculiar status: it is not only possessed by the person

who has it, it also possesses and constitutes him. Our body is quite different from all the

other things we claim as our own. We can lose money, books and even houses and still

remain recognisably ourselves, but it is hard to give any intelligible sense to the idea of a

disembodied person. Although we speak of our bodies as premises that we live in, it is a

special form of tenancy: our body is where we can always be contacted” (1). The person who

seeks health care is of course a consumer – as with all other products and services – and

may also be a co-producer of his or her health, in following good habits of diet, hygiene and

exercise, and complying with medication or other recommendations of providers. But he or

she is also the physical object to which all such care is directed.

Health, then, is a characteristic of an inalienable asset, and in this respect it somewhat

resembles other forms of human capital, such as education, professional knowledge orathletic skills. But it still differs from them in crucial respects. It is subject to large and un-

predictable risks, which are mostly independent of one another. And it cannot be accumu-

lated as knowledge and skills can. These features are enough to make health radically unlike

all other assets which people insure against loss or damage, and are the reason why health

insurance is more complex than any other kind of insurance. If a car worth US$ 10 000

would cost $15 000 to repair after an accident, an insurer would only pay $10 000. The

impossibility of replacing the body, and the consequent absence of a market value for it,

precludes any such ceiling on health costs.

Since the poor are condemned to live in their bodies just as the rich are, they need

protection against health risks fully as much. In contrast, where other assets such as hous-

ing are concerned, the need for such protection either does not arise, or arises only inproportion to income. This basic biological difference between health and other assets even

exaggerates forms of market failure, such as moral hazard and imperfect and asymmetric

information, that occur for other goods and services. Directly or indirectly, it explains much

of the reason why markets work less well for health than for other things, why there is need

for a more active and also more complicated role for the state, and in general why good

performance cannot be taken for granted.

The physical integrity and dignity of the individual are recognized in international law,

yet there have been shameful instances of the perversion of medical knowledge and skills,

such as involuntary or uninformed participation in experiments, forced sterilization, or vio-

lent expropriation of organs. Health systems therefore have an additional responsibility to

ensure that people are treated with respect, in accordance with human rights.This report sets out to analyse the role of health systems and suggest how to make them

more efficient and, most importantly, more accessible and responsive to the hundreds of

millions of people presently excluded from benefiting fully from them. The denial of access

to basic health care is fundamentally linked to poverty – the greatest blight on humanity’s

landscape. For all their achievements and good intentions, health systems have failed glo-

bally to narrow the health divide between rich and poor in the last 100 years. In fact, the

gap is actually widening. Some such worsening often accompanies economic progress, as

the already better-off are the first to benefit from it. But the means exist to accelerate the

sharing by the poor in these benefits, and often at relatively low cost (see Box 1.1). Finding


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a successful new direction for health systems is therefore a powerful weapon in the fight

against poverty to which WHO is dedicated. Not least for the children of the new century,

countries need systems that protect all their citizens against both the health risks and the

financial risks of illness.

W HAT IS A HEALTH SYSTEM?In today’s complex world, it can be difficult to say exactly what a health system is, what

it consists of, and where it begins and ends. This report defines a health system to include

all the activities whose primary purpose is to promote, restore or maintain health.

Formal health services, including the professional delivery of personal medical atten-

tion, are clearly within these boundaries. So are actions by traditional healers, and all use of

medication, whether prescribed by a provider or not. So is home care of the sick, which is

how somewhere between 70% and 90% of all sickness is managed (2). Such traditional

public health activities as health promotion and disease prevention, and other health-

enhancing interventions like road and environmental safety improvement, are also part of

the system. Beyond the boundaries of this definition are those activities whose primary purpose is something other than health – education, for example – even if these activities

have a secondary, health-enhancing benefit. Hence, the general education system is out-

side the boundaries, but specifically health-related education is included. So are actions

intended chiefly to improve health indirectly by influencing how non-health systems func-

tion – for example, actions to increase girls’ school enrolment or change the curriculum to

make students better future caregivers and consumers of health care.

Box 1.1 Poverty, ill-health and cost-effectiveness

The series of global estimates of the burden of disease do not dis-

tinguish between rich and poor,but an approximate breakdowncan be derived by ranking coun-tries by per capita income, aggre-gating from the lowest andhighest incomes to form groupseach constituting 20% of theworld’s population, and studyingthe distribution of deaths in eachgroup, by age,1 cause and sex.2

These estimates show that in1990, 70% of all deaths and fully92% of deaths from communica-

ble diseases in the poorest quintilewere “excess” compared to themortality that would have oc-curred at the death rates of therichest quintile. The figures for to-tal losses of disability-adjusted life

years (DALYs) were similar, with alarger contribution from noncom-

municable diseases. The large differ-ence between the effects of communicable and noncommunic-able diseases reflects the concentra-tion of deaths and DALYs lost tocommunicable diseases among theglobal poor: about 60% of all ill-health for the poor versus 8–11 %among the richest quintile. This isstrongly associated with differencesin the age distribution of deaths: justover half of all deaths among thepoor occur before 15 years of age,

compared to only 4% among therich. The difference between thepoor and the rich is large even in atypical high-mortality African coun-try, and much greater in a typicallower-mortality Latin American

country, where deaths at early ageshave almost been eliminated

among the wealthy.There are relatively cost-effective

interventions available against thediseases that account for most of these rich–poor differences, andparticularly to combat deaths andhealth losses among young chil-dren.3 Interventions costing an es-timated $100 or less per DALY savedcould deal with 8 or 9 of the 10 lead-ing causes of ill-health under theage of 5 years, and 6 to 8 of the 10main causes between the ages of 5

and 14 years. All of these are eithercommunicable diseases or forms of malnutrition. Death and disabilityfrom these causes is projected todecline rapidly by 2020, roughlyequalizing the health damage from

communicable and noncom-municable diseases among the

poor. If the projected rate of de-cline of communicable diseasedamage could be doubled, theglobal rich would gain only 0.4years of life expectancy, but theglobal poor would gain an addi-tional 4.1 years, narrowing the dif-ference between the two groupsfrom 18.4 to 13.7 years. Doublingthe pace of reduction of non-communicable disease damage,in contrast, would preferentiallybenefit the well-off as well as

costing considerably more. The as-sociation between poverty andcost-effectiveness is only partial,and probably transitory, but in to-day’s epidemiological and economicconditions it is quite strong.

1 Gwatkin DR. The current state of knowledge about how well government health services reach the poor: implications for sector-wide approaches. Washington, DC, The World Bank,5 February 1998 (discussion draft).

2 Gwatkin DR, Guillot M. The burden of disease among the world’s poor: current situation, future trends, and implications for policy. Washington, DC, Human Development Network

of The World Bank, 2000.3 World development report 1993 – Investing in health . New York, Oxford Universit y Press for The World Bank, 1993: Tables B.6 and B.7.


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This way of defining a system does not imply any particular degree of integration, nor

that anyone is in overall charge of the activities that compose it. In this sense, every country

has a health system, however fragmented it may be among different organizations or how-

ever unsystematically it may seem to operate. Integration and oversight do not determine

the system, but they may greatly influence how well it performs.

Unfortunately, nearly all the information available about health systems refers only to

the provision of, and investment in, health services: that is, the health care system, includ-

ing preventive, curative and palliative interventions, whether directed to individuals or to

populations. In most countries, these services account for the great bulk of employment,

expenditure and activity that would be included in a broader notion of the health system,

so it might seem that little is lost in concentrating on a narrower definition that fits the

existing data. Those data have required great efforts to collect – and this report further offers

several kinds of information and analysis, such as estimates of life expectancy adjusted for

time lived with disability, assessments of how well health systems treat patients, national

health accounts, and estimates of household contribution to financing.

Nonetheless, efforts are needed to quantify and assess those activities implied by the

wider definition, so as to begin to gauge their relative cost and effectiveness in contributing to the goals of the system. To take one example, in the United States between 1966 and

1979 the introduction of a variety of safety features in automobile design (laminated

windshields, collapsible steering columns, interior padding, lap and shoulder belts, side

marker lights, head restraints, leak resistant fuel systems, stronger bumpers, increased side

door strength and better brakes) helped reduce the vehicle accident fatality rate per mile

travelled by 40%. Only three of these innovations added more than $10 to the price of a car,

and in total they accounted for only 2% of the average price increase during 1975–1979 (3).

From 1975 to 1998, seat belts saved an estimated 112 000 lives in the United States, and

total traffic fatalities continued to fall. The potential health gains were even greater: in 1998

alone, 9000 people died because they did not use their belts (4).

The potential savings in other countries are very large. Road traffic accidents are increas-ing rapidly in poor countries and are projected to move from the ninth to third place in the

worldwide ranking of burden of ill-health by the year 2020. Even in many middle income

countries, the fatality rates per head or per vehicle mile are much higher than in the United

States (5). Sub-Saharan Africa has the world’s highest rate of fatalities per vehicle. The cost

of improving vehicles may be high, relative to expenditure on health care, in low and mid-

dle income countries, so the effect of including such activities in the definition of the health

system may be greater. Unsafe roads also contribute greatly to the vehicular toll in poorer

countries, and the cost of improving roads could be much larger than the cost of making

cars safer. But behavioural changes such as using seat belts once installed, and respecting

speed limits, are nearly costless and could save many lives; they are very likely to be more

cost-effective than treatment of crash victims. Where information corresponding to a broader definition of health systems is not avail-

able, this report necessarily uses the available data that match the notion of the health care

system. Even by this more limited definition, health systems today represent one of the

largest sectors in the world economy. Global spending on health care was about $2985

billion (thousand million) in 1997, or almost 8% of world gross domestic product (GDP),

and the International Labour Organisation estimates that there were about 35 million health

workers worldwide a decade ago, while employment in health services now is likely to be

substantially higher. These figures reflect how what was for thousands of years a basic,

private relationship – in which one person with an illness was looked after by family mem-


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bers or religious caregivers, or sometimes paid a professional healer to treat him or her –

has expanded over the past two centuries into the complex network of activities that now

comprise a health system.

More than simple growth, the creation of modern health systems has involved increas-

ing differentiation and specialization of skills and activities. It has also involved an im-

mense shift in the economic burden of ill-health. Until recently, most of that burden took

the form of lost productivity, as people died young or became and remained too sick to

work at full strength. The cost of health care accounted for only a small part of the economic

loss, because such care was relatively cheap and largely ineffective. Productivity losses are

still substantial, especially in the poorest countries, but success in prolonging life and re-

ducing disability has meant that more and more of the burden is borne by health systems.

This includes the cost of drugs – for controlling diabetes, hypertension, and heart disease,

for example – that allow people to stay active and productive. Part of the growth in re-

sources used by health systems is a transfer from other ways of paying for the economic

damage due to illness and early death.

The resources devoted to health systems are very unequally distributed, and not at all in

proportion to the distribution of health problems. Low and middle income countries ac-count for only 18% of world income and 11% of global health spending ($250 billion or 4%

of GDP in those countries). Yet 84% of the world’s population live in these countries, and

they bear 93% of the world’s disease burden. These countries face many difficult challenges

in meeting the health needs of their populations, mobilizing sufficient financing in an

equitable and affordable manner, and securing value for scarce resources.

Today in most developed countries – and many middle income countries – govern-

ments have become central to social policy and health care. Their involvement is justified

on the grounds of both equity and efficiency. However, in low income countries – where

total public revenues for all uses are scarce (often less than 20% of GDP) and institutional

capacity in the public sector is weak – the financing and delivery of health services is largely

in the hands of the private sector. In many of these countries, large segments of the poorstill have no access to basic and effective care.

W HAT DO HEALTH SYSTEMS DO?

For rich and poor alike, health needs today are very different from those of 100 or even

50 years ago. There are growing expectations of access to health care in some form, and

growing demands for measures to protect the sick, and their families, against the financial

costs of ill-health. The circle in which health systems are required to function has been

pushed yet wider by raised awareness of the impact on health of developments such as

industrialization, road transport, environmental damage and the globalization of trade.

People also now turn to health systems for help with a much wider variety of problemsthan before – not just for the relief of pain and treatment of physical limitations and emo-

tional disorders but for advice on diet, child-rearing and sexual behaviour that they used to

seek from other sources.

People typically come into direct contact with a health system as patients, attended by

providers, only once or twice a year. More often their contact is as consumers of non-

prescription medications and as recipients of health-related information and advice. They

meet the system as contributors to paying for it, knowingly every time they buy care out of

pocket or pay insurance premiums or social security contributions, and unknowingly when-

ever they pay taxes that are used in part to finance health. It matters very much how the


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system treats people’s health needs and how it raises revenues from them, including how

much protection it offers them from financial risk. But it also matters how it responds to

their expectations. In particular, people have a right to expect that the health system will

treat them with individual dignity. So far as possible, their needs should be promptly at-

tended to, without long delays in waiting for diagnosis and treatment – not only for better

health outcomes but also to respect the value of people’s time and to reduce their anxiety.

Patients also often expect confidentiality, and to be involved in choices about their own

health, including where and from whom they receive care. They should not always be ex-

pected passively to receive services determined by the provider alone.

In summary, health systems have a responsibility not just to improve people’s health but

to protect them against the financial cost of illness – and to treat them with dignity. As is

discussed in more detail in Chapter 2, health systems thus have three fundamental objec-

tives. These are:

• improving the health of the population they serve;

• responding to people’s expectations;

• providing financial protection against the costs of ill-health.

Because these objectives are not always met, public dissatisfaction with the way health

services are run or financed is widespread, with accounts of errors, delays, rudeness, hostil-

ity and indifference on the part of health workers, and denial of care or exposure to calami-

tous financial risks by insurers and governments, on a grand scale.

Because better health is the most important objective of a health system, and because

health status is worse in poor populations, one might assume that for a low income coun-

try, improving health is all that matters. Concern for the non-health outcomes of the sys-

tem, for fairly sharing the burden of paying for health so that no one is exposed to great

financial risk, and attending to people’s wishes and expectations about how they are to be

treated, would then be considered luxuries, gaining in importance only as income rises and

health improves. But this view is mistaken, for several reasons. Poor people, as indicatedearlier, need financial protection as much as or more than the well-off, since even small

absolute risks may have catastrophic consequences for them. And the poor are just as enti-

tled to respectful treatment as the rich, even if less can be done for them materially. More-

over, pursuing the objectives of responsiveness and financial protection does not necessarily

take substantial resources away from activities to improve health. Much improvement in

how a health system performs with respect to these responsibilities may often be had at

little or no cost. So all three objectives matter in every country, independently of how rich or

poor it is or how its health system is organized. Better ways of achieving these objectives,

treated in later chapters, are similarly relevant for all countries and health systems, although

the specific implications for policy will vary according to income level and the cultural and

organizational features of the system.

W HY HEALTH SYSTEMS MATTER

The contribution that health systems make to improving health has been examined

much more closely than how well they satisfy the other two objectives mentioned above,

for which there is little comparable information and analysis. This report therefore develops

measures corresponding to all three objectives, for assessing how systems perform. Even

the contribution that health systems make to improved health is difficult to judge, because

different kinds of evidence seem to give conflicting answers. At the level of interventions


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against particular diseases or conditions, there is now substantial and growing evidence

that large improvements in health can be achieved at reasonable cost, for individuals and

for large populations (6). Such data are the basis for estimates that in poor countries, roughly

one-third of the disease burden in 1990 might be averted at a total cost per person of only

$12 (7).

Even without progress in fundamental science, changes in the way currently available

interventions are organized and delivered can reverse the spread of an epidemic and dra-

matically reduce the cost of saving a life. For example, in the Brazilian Amazon, greater

emphasis on early malaria case detection and treatment, together with more focused ef-

forts on mosquito control, turned around an epidemic and cut the cost of saving a life by

case prevention from nearly $13 000 to only about $2000 (8).

At the level of overall progress in health, as reported in The world health report 1999 , the

generation and utilization of knowledge – that is, scientific and technical progress – ex-

plained almost half of the reduction in mortality between 1960 and 1990 in a sample of 115

low and middle income countries, while income growth explained less than 20% and in-

creases in the educational level of adult females less than 40%. Such estimates summarize

progress in developing and applying interventions of many kinds against a large number of diseases. Prominent among these are antimalaria and immunization programmes, and the

increasing use of antibiotics for the treatment of respiratory and other infectious diseases.

Since it is the health system that develops and applies those interventions, two kinds of

evidence, one detailed and the other aggregated, indicate clearly that health systems not

only can but do make a large difference to health.

Taking a narrower focus on diseases for which there are effective treatments, numerous

studies beginning in the 1970s (9, 10) have consistently found that preventable deaths, that

is “deaths due to causes amenable to medical care” have fallen at a faster rate than other

deaths. Similarly, a comparison of death rate differences between western Europe and for-

merly communist countries of eastern Europe attributed 24% of the difference in male life

expectancy and 39% of that in female life expectancy to the availability of modern medicalcare. Such care is not guaranteed simply by the existence of medical facilities (11).

At the same time, other evidence seems to show that health systems make little or no

difference. This emerges from some other comparisons across countries rather than through

time. Often these show that while per capita income is strongly related to some measure of

health status – as are other factors such as female education, income inequality or cultural

characteristics – there is little independent connection with inputs such as doctors or hos-

pital beds (12) , with total health expenditure (13) , with expenditure only on conditions

amenable to medical care (14) , or with public spending on health (15). It is not surprising to

find that these relations are weak in rich countries, since many causes of death and disabil-

ity are already controlled and there are many different ways to spend health system re-

sources, with quite varying effects on health status. But health system expenditure oftenseems to make little difference even in poor countries with high infant and child mortality,

which it should be a priority to reduce.

Furthermore, health systems make costly, even fatal mistakes far too frequently. In the

United States alone, medical errors in hospitals cause at least 44 000 needless deaths a year,

with another 7000 occurring as a result of mistakes in prescribing or using medication,

making these errors more deadly than such killers as motor vehicle accidents, breast cancer

and AIDS (16). The economic cost of these mistakes is at least $17 billion, of which health

care costs are more than half. And even when no one makes errors, patients often acquire


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new infections in hospital, and the massive use of antibiotics promotes pathogen resist-

ance to them, so that some part of ill-health is caused by the very efforts to treat it.

These conflicting kinds of evidence can be reconciled in two ways: first, by noting that

while health systems account for much health progress through time, that progress is far

from uniform among countries at any one time, even among countries with similar levels

of income and health expenditure; and second, by recognizing that the errors of the system

diminish but do not offset the good it accomplishes. Nonetheless, “there is an enormous

gap between the apparent potential of public spending to improve health status and the

actual performance” (15) , and the same is doubtless true of resource use in general. One

measure of t

WHO - Health Systems: Improving Performance

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